Thursday, December 10, 2015

Asa Hutchinson's political strategy for continuing the private option: give it a new name

Posted By on Thu, Dec 10, 2015 at 10:29 AM

WHAT'S IN A NAME: Hutchinson seeks to keep the Obamacare-funded coverage expansion in place. Just don't call it the "private option." - BRIAN CHILSON
  • WHAT'S IN A NAME: Hutchinson seeks to keep the Obamacare-funded coverage expansion in place. Just don't call it the "private option."

I had to chuckle yesterday when I read the accounts of Gov. Asa Hutchinson's speech earlier this week on health care and the future of the private option. The governor's  clunky attempts at re-branding are getting a little heavy-handed. The "new" program is going to be called "Arkansas Works," he reminded the annual conference of Medicaid providers he addressed on Tuesday. "Please understand very carefully that on Dec. 31, 2016, the private option ends," he said. 

Okay. Hutchinson can call it whatever he wants. But here's the plan Hutchinson is backing: Use Obamacare funds to continue the Medicaid coverage expansion that provides health insurance for more than 200,000; instead of covering them by the traditional Medicaid program, most beneficiaries will be covered by private plans on the Health Insurance Marketplace, paid for in full by Medicaid.

If you've been following politics in Arkansas for the last three years, you probably recognize that the name most commonly used for what I've just described is the "private option." The private option — the Obamacare-funded coverage expansion using Medicaid funds to purchase private health insurance for low-income Arkansans — is not ending on December 31, 2016 in any meaningful way. Hutchinson's recommendation is to continue it. The consultant hired by the Health Reform Legislative Task Force recommends continuing it. And all indications are that the task force itself will recommend continuing it. 

It is true that Hutchinson, the consultant, and the task force are endorsing some small changes to the private option policy. We've covered them at length here and here and here and here and here — carrot-and-stick incentives for wellness and job training, including small premiums for those who fail to participate; a punitive six-month lockout from coverage on those who are slapped with premiums and fail to pay; a proposed asset test that will almost certainly be a no-go with the feds; a premium assistance program to keep people on employer-sponsored insurance; and various other tweaks. It's a laundry list of Republican talking points (encourage work, personal responsibility, "ladder of opportunity," etc.) and a familiar one: these are the goodies that Republican leaders across the country have sought as political cover for expanding Medicaid.

To be clear, many of these changes are bad policies that could create more bureaucracy and harm access to care for poor people. Though many of the policies would only impact a small subset of the expansion population, they could do real harm to people's lives, and may well turn out not to be cost-effective, or to be counterproductive. But in the context of the multi-billion-dollar coverage expansion, this largely amounts to adding bells and whistles. This is still the private option. It's still Medicaid expansion. And the whole thing is still funded by...Obamacare.

It's hardly surprising that for all of the campaign bluster, Hutchinson and Republicans in the legislature aren't really going to kill the private option, as many promised. First of all, that would mean more than 200,000 Arkansans losing their health insurance, a political nightmare. We are seeing the same political dynamic play out in Kentucky: newly elected Gov. Matt Bevin campaigned on ending the state's Medicaid expansion, but now that he actually has the chance to do it, he's backtracking, planning to continue the coverage expansion with similar Republican tweaks to those that Hutchinson and the task force are now pushing here in Arkansas. It's easy to make campaign promises, but it's hard to actually kick hundreds of thousands of citizens off of their health insurance. Opponents of the private option often promised that they could somehow cover these folks without relying on Medicaid expansion or the federal Obamacare money, but shockingly, over the course of three years of fierce debate, no magic alternative plan emerged. You don't need a million-dollar consultant to tell you that this was always the choice: either learn to love Obama money or get ready to send out hundreds of thousands of cancellation letters. Meanwhile, perhaps even more importantly to Hutchinson, the private option pours federal money into the state, which ends up projecting to save the state budget more than $400 million between 2017 and 2021. If legislators followed campaign promises and killed the policy, they'd blow a giant hole in the budget. 

None of this is new. The political, policy, and economic dynamics have been clear since Hutchinson first pushed the idea of creating a task force earlier this year. The big picture approach that made the most sense for Hutchinson politically — continue the private option but with the same sorts of conservative tweaks that other red states have done in expanding Medicaid — was obvious well before the consultant was hired by the task force. It's worth noting that the slate of changes Hutchinson is recommending — like work encouragement and wellness incentives, with small premiums imposed if folks don't comply — are precisely the sorts of incremental conservative changes that the Republican backers of the private option publicly envisioned when they pushed the original law back in 2013. This isn't a change in course, it's a continuation of the plan. 

The issue, of course, is that Hutchinson ran as an anti-Obamacare candidate and dozens of Republicans in the legislature ran explicitly on hardcore opposition to the private option itself. Despite the overwhelming fiscal and political arguments (not to mention the moral part) for continuing the policy, many Republican lawmakers can't vote for "the private option." Hutchinson himself was explicit about the problem when he gave his first major speech on the private option, back in January: "The phrase Private Option itself has become politically toxic, so much so that it's almost impossible to have a constructive conversation about healthcare reform without passions rising and folks taking sides."

That's why Hutchinson is now begging us to "please understand very carefully" that the private option is going to end, and be replaced by Arkansas Works. Legislators who promised to kill the private option get to kill the "private option" and vote for "Arkansas Works" instead!

Well, whatever Works. 

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